Venture debt firm Stride Ventures said Tuesday it has marked the first close of its third fund at $100 million (nearly Rs 821 crore).
The fund raised capital from a diverse group of institutional investors, including banks, insurance companies, and family offices, Stride said in a statement. The firm is looking to raise more than $200 million under the fund.
Stride said the fund will make investments in startups that demonstrate robust business models, strong unit economics, and competent management teams.
Stride provides debt to startups in high-growth sectors such as consumer internet, finTech, SaaS, and B2B platforms. It had raised over $200 million for its second venture debt fund.
It has made over 100 startup investments through its first two funds. The firm has previously backed a large number of startups such as Sugar Cosmetics, The Good Glamm Group, Mensa Brands, Zepto, Yubi (CredAvenue), BluSmart, Uni, Upstox, WayCool, MensaBrands, MediBuddy, Wiz Freight, Perfios, Moneyview, VideoVerse, and Groyyo.
The firm estimates the annual deployment of venture debt to reach $3-4 billion by 2025, and claims that it is capitalizing on this growth potential.
Stride founder and managing partner Ishpreet Singh Gandhi claimed that the firm is the largest contributor of credit to new-age businesses, having sanctioned over Rs 5,000 crore to Indian startups thus far.
The firm also said that it has distributed over 100% of its commitments, including coupon payouts and principal redemptions, to the early investors of its Fund 1.
Last year, Indian startups raised close to $800 million in venture debt, with the challenging economic climate slowing down equity funding for growth and late-stage companies. The amount of debt funding disbursed to Indian startups experienced a significant surge, increasing by 2.6 times compared to 2019 when the funding amount stood at approximately $281 million, showed a report released on Friday by Stride Ventures.
"We see a growing demand for venture debt as startups look to optimize their capital structure and preserve equity for future rounds. With the launch of our third fund, we're well-positioned to meet the unique debt requirements and global ambitions of Indian startups,” said Apoorva Sharma, managing partner at Stride Ventures.
Besides Stride, there are several other firms which are providing debt investments to Indian startups. These include Singapore-based investment firm Lighthouse Canton, PAG-backed Nuvama Wealth Management, venture debt marketplace 8vdX, Alteria Capital, Trifecta Capital, and alternative credit platform BlackSoil Capital.